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Obesity drug obstacles
Withdrawal of Glaxo drug highlights problems for weight-loss wonder cures.
February 10, 2005: 4:22 PM EST
By Aaron Smith, CNN/Money staff writer

NEW YORK (CNN/Money) - Millions of Americans are still waiting for their weight-loss wonder drug, and the inventor of such a drug stands to make a fortune.

The problem is that no such drug now exists, and some experts believe it never will, despite its incredible market potential and health benefits.

With nearly two-thirds of adults considered obese or overweight by the Centers for Disease Control and Prevention, the American market for a drug that reduces obesity with minimal side affects is vast. But that market is also untapped, because developing such a drug is notoriously difficult, according to analysts who cover the industry.

"It's wide open," said Gbola Amusa, analyst for Bernstein & Co. "The obesity market is unique in that it is probably the largest market in the world. However, nothing really works well in terms of safety and tolerability."

This fact was demonstrated when British drug maker GlaxoSmithKline (up $0.95 to $46.67, Research) announced Thursday it had stopped testing 771, an obesity-reduction drug, because participants in the tests were not losing enough weight. "It didn't show sufficient efficacy to be competitive," said spokesman Rick Koening.

Amusa said French manufacturer Sanofi-Aventis SA (down $0.30 to $33.10, Research) plans to submit Acomplia, another obesity-reduction drug, to the Food and Drug Administration this year, but its potential remains in doubt. He said that, if approved, sales of Acomplia could hit $2 billion to $3 billion in the United States.

Officials at Sanofi's press office in France were not immediately available for comment.

But will Acomplia turn out to be free of unpleasant side effects?

"It's too early to tell," said Kevin Scotcher, analyst for SG Securities. "What you need is a drug that reduces weight with no side-effect problems. Drugs like that are very rare and often don't exist."

For example, sales of the two drugs currently on the market -- Xenical and Meridia -- total less than $500 million and are limited by their side effects, according to analysts.

"[The market] is under-performing in terms of sales because it's tough to find something that works," said Amusa.

Xenical, produced by Roche, blocks fat from being digested but causes an oily discharge and inability to control bowel movements, according to the company.

"They either stop taking the drug because they think they don't need it anymore, or because they can't tolerate the side effects," said Scotcher. "That's what happened with Xenical."

Meridia, made by Abbott Laboratories (down $0.18 to $44.98, Research), causes weight loss but increases blood pressure and heart rate in some patients, according to the company.

"It should not be used by people with cardiovascular problems, and who has cardiovascular problems?" said Amusa. "Obese people."

GlaxoSmithKline plans to submit Orlistat, an over-the-counter version of the Roche-produced drug Xenical to the FDA this year, said Keoning.

The market for obesity drugs gained notoriety in 1999, when American Home Products Corp. (Research), maker of the "fen-phen" diet drugs, agreed to pay $3.75 billion to thousands of people who used the drugs before they were pulled from the market in 1997.

The FDA forced the recall of the fen-phen drugs, Redux and Pondimin, after they were linked to heart-valve disease.

Until America has its wonder drug, only consumers who are willing to brave the side effects will continue to take obesity medication and continue to pay the price, analysts said.

"It's very costly for Americans to continue to fatten up," said Amusa, citing estimates of $150 billion a year in health costs.  Top of page

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